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15 April 2013

15th
April 2013, Monday

Residential

Striking a new balance on flat
prices

Source: The Straits
Times

The Government is trying to find a
new balance between keeping new flats affordable yet fulfilling Singaporeans'
desires for their home values to rise, said Minister in the Prime Minister's
Office Grace Fu Sunday.

For decades, new flat prices were
pegged to resale ones, so that home owners' asset values would grow, she said.

"If we were selling Build-To-
Order flats at a much lower price than resale flats, you would find people
turning away from resale and then flat prices would be less able to rise,"
she explained to Jalan Kayu residents at a dialogue.

But this peg, which was removed in
2011, also made the price of new flats spiral out of young Singaporeans' reach
as prices in the resale market spiked 80 per cent in the last six years.

The opposing concerns within a family
exemplified the Government's challenge, Ms Fu pointed out. "Sometimes we
hear parents say, flats should be cheaper so my son or daughter can buy. But
don't depress (prices) so much because I want my house (value) to stay
high."